Mr. Money Mustache, UBER Driver

Unrelated Surprise: Did you know there is now an MMM Android App? It’s really good. Beautiful offline reading. Alerts you to new articles automatically, if you want. Thousands of users already. Free. Many more features (plus an Apple version) to come. It’s on the Google Play Store.

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About two years ago, I switched from taking my personal car to the airport, to hailing Ubers and Lyfts. The math of it was pretty simple: Uber was cheaper than paying for my driving and parking*. And that was before the considerable joy and time savings of not having to park in the airport lot and cram in among the huddled masses in the shuttle buses. Nowadays I sit in the back and get some work done like an Executive, leaving the driving to someone else.

Once I arrive at my destination city, these ride sharing services have replaced at least 90% of instances where a car rental would be useful. Between walking, renting a bike, public transit and calling a Lyft, a car rental is only useful for destinations deep in the boondocks such as a ski resort or a distant beach cabin. Which is another great improvement, since renting a car at an airport has never been a fun experience.

But during all these Luxury Executive rides, I’d often get to talking with the driver. We would talk about life, family, money and business. I always inquired about their experience with rideshare driving, and the response was inevitably something like this:

UBER DRIVER: “Oh, it’s pretty good. On a good day I’ll make a hundred bucks, sometimes even two hundred if I really work it and stay up late.”

MMM: “Is that your profit after subtracting the cost of driving?”

UBER DRIVER: “No, that doesn’t include gas. But I’ll only use, like, not even a full tank – maybe thirty bucks”

“Hmm”, I would think to myself.

“If this driver is burning through $30 of gas, (twelve gallons), they’re probably covering over 250 miles. Whether they realize it or not, it’s costing them $125 in direct car costs before even accounting to the damage to their health or the risk of injury. Thus, the net profit might be as low as $50 for a big day on the road, or five bucks an hour.”

There’s no way Uber could be such a successful company if the pay rate were really this low. Is there?

But on the other hand, some of my Uber drives to the airport have included a Dodge Ram pickup truck (V-8 engine, fancy wheels, bought brand new on credit), a BMW X5 and even a Hummer H3 (with over 250,000 miles on the odometer). Maybe people really are that uninformed about the cost of driving. As my friend Bill said when we talked about this:

“Imagine developing a company specifically to take advantage of people’s ignorance of how expensive it really is to drive their own car. What would this company look like? “

(the answer is of course that it would look like very much like Uber or any other ridesharing company)

To resolve this mystery (and as a way of getting some test miles on my new electric car), Mr. Money Mustache decided to go deep undercover in September 2016, and sign up as a driver for both Uber and Lyft services.

The Initiation

Using another driver’s referral code, I signed up on the Uber system and started to follow the instructions. I needed a background check, medical exam, car safety inspection and a few other daunting things. Luckily, Uber runs facilities called “Greenlight Centers” which put all this stuff in one place. The closest one to me was about 40 miles away in Denver, so I charged up my new Leaf and headed down.

When I arrived, I found an interesting scene that nicely personifies our new sharing economy. It was a mashup of an Apple Store and the DMV. Modern design and furniture, good music and glossy tablets everywhere, combined with an ocean of slightly desperate and bored looking people waiting to start their new driving careers. And Mr. Money Mustache, trying to blend in.

It was a funny feeling, spending those three precious hours of my Tuesday morning, waiting in queues and filling out forms. I was keen to learn about the driver experience and how things work in the New Economy. But I also felt a bit of the nervous “I’m applying for a new job” energy of the other applicants, and like a bit of a fraud for being here when I had absolutely no interest in truly having a job.

There was a trendy little cafe in the corner of the room, so I strolled over and picked up a Clif bar and a coffee. Due to my naive privilege as a former tech worker, I expected it all to be free – after all, don’t all offices offer free coffee and snacks, along with a keg of local beer and another tap for Kombucha? But a man popped out from around the corner and rung me up for $3.85. On top of that, it was a bland coffee in a small cup. This was an interesting reminder that working in a lower-training job is a different world than the one you and I probably both inhabit, here at the top of the economy.

When the process was finally done, my 25-year-old Uber concierge looked up from his iPad and issued me a genuinely warm congratulations and we shook hands.

“So that’s it?”, I asked

“Yeah! That’s it! You could go out and get in your car start making some money RIGHT NOW!”

“Hmmm…”

“Nah”, I thought to myself. “Eighty miles of driving plus three hours in an office building is more than enough wasted indoor time for me for the next little while.”

The spoiled retiree in me loves hard work, but only the right kind of hard work. The sedentary locked-indoors variety of work always falls to the bottom of the list. As you can tell by the low frequency of these blog posts.

My First Ride

Eventually, I was ready to give it a whirl. I cleaned up my car, stuck the Uber decal on the windshield, put on some nice clothes, mounted my phone on a sturdy dashboard clamp, and fired up the app. Within minutes, I had my first ring.

RIDE REQUESTED! John, 5 minutes away.

The ring was deafeningly loud, because (as I later learned after half an hour of looking unsuccessfully for a way to change it) the Uber app overrides your ring volume setting and sets it to !!MAXIMUM!! I was so startled that I could hardly slide the “accept” button, but I eventually got safely on the road. I recognized the address as Longmont’s “Pumphouse” brew pub, right downtown.

I headed down the hill and scoped the area, and eventually found John. As he hopped in the car I slid the “start trip” button and his destination was revealed as the local Marijuana shop, just 1.9 miles away.

John and I exchanged pleasant conversation and he was impressed by the quick silence of the electric car. I dropped him off at Native Roots and then parked nearby, expecting another fare to pop up just as quickly.

But the second fare wasn’t quite as quick. Fifteen minutes later, the Uber app rang again. It was John, now properly restocked and thrilled that I was still there in the weed shop parking lot. We headed back to the Pumphouse.

Hey this wasn’t so bad: that five dollar tip really brought up the average. I was thirty minutes into my career and up about 12 bucks, minus five miles of car costs.

After another five minutes of idle time, the app rang again. This time it was a suburban address listed as 12 minutes (which turned out to be almost four miles) away. I decided to take the ride anyway, in the spirit of experimentation.

I got to the house, but nobody was there. After a minute, I used the Uber app to send the customer a text message. “Oh sorry!”, he said, “My phone GPS isn’t working well because we’re inside so it probably shows us in the wrong place! We’re just on the next street.”

I drove around a bit more and eventually found the young couple, and the app revealed a nice surprise: they were headed all the way to Boulder, which was over 12 miles from this part of Longmont. Surely now I would start earning the big bucks.

After 24 minutes of smooth, expert driving and pleasant conversation, I dropped them off at a restaurant. But I was surprised to see that the total wasn’t that impressive:

Now I was in Boulder, which has a much bigger scene than Longmont. Everybody is rich, every night is a big night, the University of Colorado is right downtown and it’s all action – there are no real suburbs. Due to high rider demand, the city operates in a perpetual “Surge Mode” which means Uber Fares are 20-30% more lucrative, and there is virtually no wait time for fares. And now, I was right downtown. So the app shrieked its notification tone immediately.

The customer was only a mile away, but due to the incredible slowness of trying to drive a 14-foot-long, 3300 pound Racing Wheelchair in a dense city it took me a lot of slow gliding in traffic and waiting at long traffic lights to get there. It was a couple of younger guys, heading back downtown.

We slogged through the dense traffic yet again at roughly one third of bicycling speed, and I earned my five dollar fare.

The app rang again, and I saw from the map it was yet another non-downtown person, probably looking for another ride downtown.

I decided not to play this game anymore, contributing to car traffic in a city that needs fewer cars. So I let this ride request go to another driver and set my destination to Longmont, hoping to find a customer heading that way so I could get paid for the ride home. There were none.

So I flew the Leaf back along the highway to home, and stopped at the grocery store to pick up some fresh food and a free battery charge for the car.

After joining Uber as a driver, it was easy to add on a Lyft license: you can submit scans or photos of the same examination info to both companies. So over the course of 2017, I fired up both Uber and Lyft apps many more times to do some more driving and collect some more observations. I tried night driving, special events, and quite a few different parts of the metro area. I had a lot of fun, but made very little money.

One time, I was summoned by a 13-year-old girl coming out of the middle school, effectively turning me into Mr. Schoolbus Dad. After finding her in the school lineup, she directed me to the elementary school, where we picked up her little brother. I dropped them both off safely at home in a rusty suburban area nearby. (note – readers have since informed me that this shouldn’t have even been allowed, as you must be over 18 to summon an Uber. She must have been using her mom’s account, and I was apparently breaking the rules by not knowing them,

Another ride was from a college student, deep in the Colorado U campus. It took me forever to navigate the throngs of after school foot and vehicle traffic and find this young lad in the crowd. During the ensuing 3MPH transit of Boulder, I couldn’t help but remark, “Wow! I apologize for how slow this trip is going. I’m usually on my bike when I cross Boulder, which is a lot faster.”
Our final destination was a strip mall, and he directed me meticulously through the entire parking lot so he could be let off within 20 feet of the front door of the restaurant. End fare for about 35 minutes of work, even with surge pricing, was another six bucks. My resolve to avoid driving cars in Boulder was reinforced.

My favorite times to be a driver were Friday nights. It was fun to feel the energy of people going out on the town, and find out what was going on. I could see Uber driving to be a good escape for single people looking to meet new friends (or romances), because I almost always got along well with the customers, often exchanging business cards or email addresses with people when we found something in common.
On longer rides with people over 30, the topic almost invariably led to life, business, and money, which led to Mustachianism, which led to me admitting my secret identity. Thus, some of my past Uber customers may even be reading this article today(?)

But in the end, it was hard to stay motivated to keep doing this experiment. There is just usually something better to dothan driving around in a car, and I wasn’t willing to sacrifice too much of my life to gather more data. And with the financial gain of rideshare driving being negligble, I am surprised that there are so many people who do it.

How to Make the Most of a Low-Profit Situation

Still, as with everything in life, I did my best to optimize Uber driving for both fun and money. From my experience as well as reading online forums, the best way you can do it is:

Use the referral and bonus system heavily. Actual driving doesn’t pay well, but I have seen bonuses pop up on my app offering between $100-$500 to refer other drivers. There are also “weekly guarantee” offers that come up occasionally, offering more pay in exchange for meeting a certain threshold.

Use the lowest cost and most fuel-efficient car you can find. Uber requires you to have a fairly new (under 10 years) car, so get something on the older side of that spectrum, but with low miles. A 2009 Prius, for example, uses less than half the fuel of most cars of similar size.

Focus your driving around on “Surge Pricing”. By watching the app throughout the days and months, you will learn when your area enters periods of higher demand. Special events like Halloween, late weekend nights or major league sports events are popular times.

Try to find trips involving highways. Since you get paid mostly by the mile, you earn almost ten times more money at 60 MPH than you make in on a long trip through central city where you might average only 6 MPH. (There is an “hourly” component to your wage as well, but it is incredibly low, somewhere in the single digits per hour.)

Experiment with the “set destination” feature to filter for rides going your way. Taking fares with you on your commute to work or to an airport.

Make the most of your downtime: there will still be lots of waiting between fares. If you bring a book, podcast, laptop or make business-related calls that help you learn a trade that pays more than driving, you can get yourself into a more lucrative trade.

Suggestions for Uber and Lyft

During the course of this experiment, I happened to receive emails from relatively senior people at both Uber and Lyft for unrelated reasons. So I took the opportunity to make some suggestions to make things friendlier for drivers:

Report the total driving time and miles for each ride and each shift, clearly specifying paid and unpaid miles and hours.

Provide an drivers an estimate of the car costs incurred, and estimated hourly earnings after these costs

Allow drivers to specify the types of rides they are willing to accept. For example, “only ring me for riders within 1 mile”, or “I would like to be paid for for both pickup mileage and rider mileage.”

Provide drivers with the details of where the person is going, or at least how long of a ride it is. Right now, Uber has all this incredibly useful information at the time of booking, but deliberately withholds it from the driver.

And here’s the best one:Instead of setting a reasonably high price per mile (around $1 in my area) and an almost-zero-dollars-per-hour rate for the driver’s time, let’s do the opposite:– 50 cents per mile, which just covers the cost of the car– plus 33 cents per minute (driver’s net after Uber fees), which is about $20.00 per hour.
This has many benefits. It reduces any temptation for drivers to rush or break the speed limit. It makes urban trips (where nobody should be using car anyway) more expensive. It makes more necessary highway trips cheaper. And it guarantees that if a driver has a customer in their car, they are not losing money.

I was surprised that both companies immediately dismissed all of these suggestions, with a round of vague excuses. This was a disappointment to the Economic Libertarian in me, because it seems obvious that an open market between buyer and seller is the key to more efficiency.

In fact, early in my driving career I learned how much the unpaid driving was hurting my profitability so I stopped accepting distant fares. The app quickly sent me this note:

Yeah, right. How about you just stop ringing me with fares that are ridiculously far away, or give me the opportunity to GET PAID FOR THE DRIVING, instead?

When these companies deliberately tilt the field, they are being sneaky, which causes them to lose public trust, which causes the public to vote in a bunch of sclerotic regulation to protect the drivers and the public. If you, as a company, just avoid being a dick to people in the first place and treat them with complete openness and good old-fashioned honesty, they are more likely to let you run free.

Since I started this experiment a year ago, Uber has fallen into a world of trouble and bad publicity. Their internal culture of sexual harassment was blown wide open, along with the misdeeds of the wild and temperamental former CEO. From specific programs to evade government regulation to annoying treatment of drivers, Uber triggered a widespread backlash which became the #deleteuber campaign. Saying “Uber” is now a bit like uttering the words “ConAgra” or “Philip Morris” or “Exxon”.

In general, I really want companies like Uber and Lyft (and Tesla, AirBnb, Google, Amazon and many of the other tech companies that have been stirring things up so much lately) to succeed, because the benefits to all of us greatly outweigh the inconvenience of the disruption.

For example, some people worry about what will happen to driving jobs as self-driving vehicles gradually take over. But I’m excited about the ways this can make our lives safer, quieter, and less expensive as we give up on owning personal cars, ride bikes much more, and use automated cars as a service whenever the bike is impractical. Technology provides a lumpy ride, but it also provides change which is an essential ingredient in every human life to avoid getting into a rut. So, share on.

Further Reading:How Big Oil Will Die – an interesting walk through the changes today’s technologies have already set in place – leading us very quickly to a place where nobody in 2010 would have even guessed.

* this sentence surely made you ask, “but what about the BUS, Mustache?!?” – good question. Of course I’d always choose biking, then public transit as the first two options, but the airport is 45 miles away (well over 2 hours by bike) and the bus requires a transfer in Denver, which makes it even slower than biking. Also, both Uber and Lyft have referral programs which give you credit for referring friends – I still have a few credits in my Uber account.

If you want to try Uber or Lyft, sign by randomly choosing one of these codes from friends, and you’ll get $5-10 off of your first ride (and give a small surprise to some of the members of the MMM-HQ coworking space!)

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I for one welcome our robot overlords. I can’t wait for autonomous vehicles to be the standard. I really do think it will help to eventually minimize costs and maximize safety. Hopefully we’ll see that happen within our lifetime. :)

I agree, autonomous vehicles can’t come soon enough. Our area has terrible sidewalks and bike lanes with very aggressive drivers making it mostly unsafe for walking and biking. I dream of a day when the human driver factor is removed and we can ride/walk in peace in my neighborhood. I would gladly pay a good amount of money for this.

AVs hold a lot of potential benefits but they’re not a magical solution to all of our transportation problems. If/when AVs hit the road, Uber rides will get way cheaper since Uber’s biggest cost is labor, but that also means that people will opt for rideshare over other modes of transportation (walking/biking/etc).

As a driver, I’m already seeing this play out with cheaper UberX fares and UberPOOL. The idea of shared rides sounds great but right now, you have a lot of people who are taking UberPOOL NOT because it’s good to carpool, but because it’s cheaper. And with cheaper and cheaper UberX fares, I’ve had many passengers go just a few blocks and when I asked why not walk, they said ‘because it was so cheap, might as well, call for a ride’.

It seems like a popular trend for FIRE bloggers to pick up gigs on Uber/Lyft – it’s sort of cute! Even for research it’s cute.

I’ve had my share of convos with Uber drivers and they’re always so optimistic about income and flexibility. I was so impressed when one of them said I can make $100 more if I stayed a few more hours at night etc. This was back when I was 22 and I didn’t have much awareness of personal finance. It didn’t occur to me how much gas, insurance, tax etc. factored in. After your math…$3 for a trip? I don’t think that’s worth it at all.

And I absolutely stand behind automation as painful as the consequences might be, humans need to change and adapt. We don’t use railroads anymore. I remember an older woman at a Costco and she was refusing to use the self check out line because it took jobs away…ummm OK lady.

I understand that older woman’s reasoning. At one point my career involved working with folks who were not easily employable, often because they were just not that smart. There used to be more jobs that people with limited mental or physical abilities could do, but now many of those jobs are gone. Whenever I go to Oregon and see the requirement for a human to gas up your car, rather than you doing it yourself, I am glad because it means someone has a job. Maybe not the best job or a job I would want to perform, but they can still earn money, have contact with other humans, have a structure to their day…I’d rather pay a bit more for the gas to support employment than pay it in welfare or disability payments. Those among us who are less able, less gifted, are being left behind as the world gets more automated and the pace of life gets faster. I feel like the gifts I have been given, in terms of intellect, education and so on, mean that I have some obligation to make sure that others less fortunate are not forgotten.

But jobs provide more than income – as Mable said, a chance to interact, structure, and most of all, the opportunity to feel needed might be as important as the income. Something for us FIRE types to keep in mind.

I’m with the older woman. The truth is that even without limited mental skills, there are those people who dont have the skills to do more, may not have the education to do more, and as mentioned in the article, it’s something folks on the high end of the economic spectrum often blow off with ease. While you may think that it’s a waste of a ob, the person who lost the job, even int he current economy, may not be able to replace that job. So like her, I simply refuse to go through the self checkout line.

I agree with above posters about the value of work and the job to the person who holds it. Moreover, I’ve yet to go through a self-check line that wasn’t an exercise in frustration and annoyance because they machines just don’t work well enough – they don’t recognize the item, they don’t recognize that I’ve placed the item in the bag, they don’t accept my coupons or my card, and so on. It’s rare that I can get through a “self” checkout without having to call the monitor to intervene. No, thanks. I’ll take my pleasant, relatively efficient interactions with the human checkout cashiers at my local grocery story any day. They have a job, and I get some pleasant small talk and, usually, a smile. And I’m typically out of the store much faster than if I’d weathered the self-check swamp.

How I wish we used MORE railroads in Northern America! Back in Europe I could virtually go anywhere by train, and it’s both cost-efficient, time-efficient (because you can do something else while riding the train) and good for the environment.
Now in Canada whenever I want to get anywhere I have to lose countless hours of my life driving.

We don’t use railroads nearly as much as we used to. At one point they were a very important way of moving passengers around for long distances. Now that job is largely done by airplanes, trains being a distant 3rd or so option. For freight, trains still play a part, but trucks have the largest part of it.

I’m very thankful for railroads. I live within 3 blocks of a commuter train to a major city. It is a two hour ride but beats driving in the city (which probably has more non car owners than anywhere in the US).

I’m also very thankful that on that same commuter train is a stop at a major airport. When I travel I don’t have to worry about a ride to the airport or parking because I can just take the train (the fare is a bit higher as the airport stop includes monorail service from the station to the terminal).

Self checkouts take away bad jobs like cashiers and replace them with maintenance men, programmers, electricians, factories to make them… I suppose the argument could be that people who have less capacities will find it harder to be employed, and I do agree that all of the trades I mentioned perform less work than the cashier would. But it’s not nearly as gloomy as described.
Self checkouts suck anyway. They are slow as molasses, make mistakes, and still require one clerk to fix the braindeadness of it. If I have a lot of items, I go to a cashier and wait. It’s worth it.

To date I’ve used Uber twice in my life — once from an airport to the hotel where I left my car, and once after a night out with friends at a bar (which happens maybe four times a year; this one was for a high school reunion). I’ve structured my life in an urban area to avoid driving whenever possible, so it’s fantastic for me. But optimized public transport, instead of the dysfunctional mess we have in DC, would be even nicer.

Ahh I live in DC too. And I too have used Uber only twice (maybe even once). Uber is still very expensive in my opinion. I try to take advantage of the Metro system, walk, or just stay in when driving is not an option.

I’m from DC also and have never used a ride sharing app. My excuse is that I own a car, live and work near Metro and bus stations. For most other trips I’ll walk, bike, or roller skate. I know the parking rules well enough so that the places I’ll drive to never have to pay for it. Maybe once per year I’ll be at the airport but if I’m traveling for work, the organization will pay for the cab.

DC guy here. To get downtown on Metro/bus costs between $2 and $4. Uber is about $10.75. But Uber takes you door to door and is much quicker. For a single traveler it is not clear which is better, and there are arguments both ways.

But when there are multiple people, Uber is clearly better. I recently took 2 kids to the Smithsonian. Uber was the same cost, and Metro would have been 3 times more than me alone.

Of course we all realize that bikes are much better than Uber or public transportation.

Czech city of Prague (small city about 1M of people which happens to be the capital) is supposed to have one of the best public transports.

It works if you want to go from rim to the center and back. But when you need to go around the center, cycling* is faster and even walking takes same time as public transportation. Talking about day. It’s almost useless after midnight.

*) No, Czech republic isn’t Netherlands. Some parts of city are 80, maybe 100 meters higher, than other. There is river in the middle.

Fare for public transport is about price of 2.5 liters of liquefied propane-butane gas [or 1.25 liters of heavily taxed gasoline] which represents fuel for 32 km (20 miles) [or 16 km (10 miles)] in common European car. As driving to the center is slow, these around the center ways happens to be 3-times faster than public transport easily. Rumor is, that the fare covers about one third of price and the rest is payed by the city.

Maybe they lied me, that public transport here is so good in compare with other places. Or it’s just impossible to create good public transport. I don’t know.

Math here is simple: if you don’t need a car at all, your time is cheap and your early-bird nature forces you to bed before midnight, public transport is a good option. If you need to have car anyway (even to use it twice a month) and the car is reasonably old and cheap, public transport becoming expensive, unreliable and slow option. Bike wins except very long travels using underground transportation, but it’s a bit unpleasant about 2-4 months during winter.

Hello,
I don’t know if that is 100% correct. With a car you need to pay for fuel, pay the insurance every year, pay for any maintenance you might need. In czech republic you also need to do the STK every 2 years and that costs money.
If you buy the yearly pass for public transportation it is a much cheaper option than owning a car.
Plus in Prague you have the metro which isn’t dependent on the traffic and also there are special lanes in the street which are just for buses/trolleys which helps with traffic.

Consider yourself lucky, Boulderite. I visited Boulder/Denver last summer and was stunned by the number of cyclists. As opposed to Pittsburgh, where they are treated as oddities, second-class citizens, or at worst…targets.

MMM, thanks for this article. Very interesting. Been thinking whether it might be worth signing up just for kicks to fill in spare time and make a little money on the side. Doesn’t sound worth it.

Despite how “lucky” Boulderites are, Pete is sharing how odd it is to have some of the best cycling amenities and still dealing with bumper to bumper traffic. And worse, able-bodied youth ride-sharing their way to the mall. Even the best town today for cycling isn’t living up to its potential.

Is there any hope for overcoming human laziness? I read this blog and a lot of urbanism blogs and like the idea of biking but still never do it. For most of my colleagues even the idea of biking or using public transport is absurd. It is really hard to switch to biking after living a completely sedentary life for years. I lived about three miles from my university for one semester and tried it but my knees and back hurt so bad. I gave up and mostly drove 3 miles to a light rail stop and took the light rail another two miles to campus.

It may be that your knees hurt because you were trying to pedal in too high a gear, trying to push to fast for your fitness, or your seat was far too low, but it’s also possible that getting some physical activity after years of sedentary transportation will inevitably be a little uncomfortable at first. If you want to *really* try it, 3 miles if very doable, but take it easy, and try a quality bike with a proper fit from a bike shop.

As far as convincing people to not be lazy? I don’t have an answer. From a public policy standpoint, the only way to get more people biking is to make it easier than alternatives. In cities with very good infrastructure, cycling is simply the easiest way to travel a distance somewhat too long to walk. Personally, I strive to step outside of my comfort zone on a regular basis because it is rewarding to do so, long term. I’ve all but given up on trying to evangelize such a philosophy, though, as it’s just depressing how little interest people have in doing so. It very much has to be a personal choice.

Man, this is a really interesting conversation. I feel for you, David – and I really think it’s an EMERGENCY for you to get back into shape.

I do understand laziness and procrastination, because I battle with those things every day. But I guess the nagging voices are just stronger in my head, because I have pretty much never gone a day with less than an hour of physical exercise.. as far as I know since I was a little kid. On the best days, I’ll be active for much more, like 6-12 hours.

Here’s a thought that often keeps me going: Laziness begets more laziness, and action gives you energy, so it helps you create even more action. Laziness leads to deep physiological depression, and action leads to happiness, so you really have no choice.

So, start every day with a little bit of walking – every day. Before you even check your email or do anything else besides maybe breakfast.

If you make it a personal, unbreakable rule: NO MOTORIZED TRANSPORT for any trip less than a mile, an a minimum of 2 miles walking per day, it might get you on the right track.

Once you get rid of the most extreme disabilities caused by inactivity, it becomes very natural and joyful – no pain required.

I like the idea of Uber and Lyft, but also hate that people like to prop it up as a solution to public transit. Public transit is heavily subsidized, and for many who can’t drive (like those with disability or those who lack the funds), a private company is no solution. Considering most Uber cars aren’t even wheelchair compliant, I don’t know how it can sub in for public transit in those situations. A $150 monthly bus pas would no way cover unlimited monthly rides in an Uber.

I do see Uber as stretching public transit, like for off hours workers or in the boonies locations, but buses still have their value in society and a private company isn’t going to take a loss (as all public transit in the US loses money) to help those who truly need it.

Hi Tara, I appreciate your comments about disabled people, I have a disabled family member (wheelchair) and I find public transportation almost unusable for her. The buses in particular are rarely wheelchair accessible. The subway usually has elevators but the hassle is rarely worth it. We live in Chicago and we take Uber more than any public transport option, luckily with my assistance we can get her in an Uber and usually the drivers are SO helpful. Just my XP to share

This is a very accurate observation. If your whip is relatively new, then driving for Uber is just gonna help cover the car payment and maybe offset some insurance, fuel, maintenance cost. Your time is effectively worthless while doing it and the depreciation your car will suffer effectively assures this.

Wow this is such an interesting experiment! I have taken Uber a couple of times, and the driver always raves about how easy it is to make an extra income with the service.

I didn’t know that you could make so little an hour. That’s a bit alarming! I think we tend to subtract the cost of gas and not think much about maintenance and insurance (i.e. possible accidents). Mr. FAF has been telling me that he wants to try driving for Uber, but for now he wants to spend his free time with our son.

Uber/Lyft are very much supply/demand driven for their pricing (which I’m sure the libertarian in you and myself loves). There are many libertarians, economists, etc working at Uber/Lyft.
However this means the pricing is driven by whatever amount of pay is sufficient to get enough drivers on the road (although that seems like a lot of drivers, it is not a large portion of the population).
As a result certain types of people are economically encouraged to drive:
* People who can’t figure out that driving costs more than $0.10 per mile
* People who want supplemental income on their own weekly schedule (it is difficult for most people to earn money on their own schedule)
* People who want to earn money on breaks between university or jobs (e.g. you want a job now, but only need it for a month)
* People who are willing to figure out what times of day and locations earn them $30/hr… and work those times.
* people who have cars that are cheap to run (like you)
* people for whom their car costs are sunk costs that they can’t escape from (e.g. a lease, some insurance) so their incremental cost per mile is only $0.20.
* people who are in debt and need to earn money now, for whom there are no other options.

Does Uber/Lyft rely on people miscalculating the cost of driving? No, but the cost of an Uber/Lyft ride would be higher otherwise, and hence the population of users would be a little smaller in the equilibrium. So people miscalculating the cost of driving helps riders more than Uber/Lyft but does help both.
Drivers and Uber/Lyft do also benefit, however, from riders miscalculating. Many riders don’t know about bus routes and times, and don’t know about the local bike shares.

One more thing I find really interesting: You can definitely drive for less than the 54 cents per mile standard mileage deduction. That means that for smart Uber drivers, a portion of your Uber income could be tax free.

I was really close to giving Uber a try as a driver, just to make a few bucks on the trips I was already making anyway. I was disappointed to find out that as a driver you cannot see the destination or even the direction of the fares you are to pick up. So, a deal breaker for me.

I requested an Uber recently, the app found a nearby driver, and then the driver called me to refuse the pickup because he said he didn’t want to drive 3 miles downtown. Somehow he was able to see my destination before he picked me up?!

I had a similar experience trying to get a ride from LAX. I had FIVE different UBERs be assigned, and immediately cancel when they found out my destination, a residential city 15 miles to the south…hardly an outrageous distance or location.

Two drivers actually called me to give me obviously bogus excuses–one said he just got pulled over by the cops and the other said he just got a flat tire, both within seconds of getting my request; what a sad coincidence! The other 3 just cancelled without a word or text.

I complained to Uber, which got me $5 for my troubles. And now I take SuperShuttle.

The apps are supposed to hide destinations to keep drivers from redlining specific areas, just like cabs are required to take you to any address regardless of the neighborhood. Seems like a reasonable approach to remedy that concern, but of course it sucks for drivers.

Exactly right, Dan! Having been a taxi driver for 5 long years in my wayward youth , I know this is the reason it is a violation with fines attached for drivers to refuse a fare once they allow the passenger in their taxi, for whatever reason but especially for destination (unless of course the passenger is drunk, disorderly, or otherwise a danger). For example, in Washington DC, even inquiring about destination before the passenger gets in is a violation known as “Asking Destination in Advance,” which carries a $50 fine; nixing your destination once they hear it is “Refusal to Haul,” a $500 violation. (I drove in Philadelphia, but the laws there are much the same as DC and other cities.)

Uh, so let me dispell this incorrect assumption. Im an eligible Uber & Lyft driver and in my region, SF Bay Area both offer a destination filter in their driver apps. When you activate the filter with your desired destination they will only assign you reqs that are relatively close to your route. I will say that turning on the filter reduces the probability of you getting a request substantially unless you’re willing to sit around and wait for a request before heading to your destination.

Great Post and experiment! When I was in high school pizza delivery driver was a popular job -for kids whos parents supplied them with a reliable car, all expenses paid.

Did you tell your car insurance company that you were using your car for uber? I read that “the uber app provides a low level of liability insurance”. Could insurance be another hidden cost for uber drivers?

Someone should do a similar experiment with AirBnB? As Ive remarked in the MMM forum, Ive been amazed at how cheap some AirBnB rentals are. With prices that low, someone is being taken advantage of and I am certain that my daily rate to renting the properties is much less than the daily cost to own it. Through the forum I learned that homeowners insurance policies dont cover short term rentals like AirBnB. I know a lot of AirBnB hosts, I dont think any of them are aware of the insurance costs or notify their homeowners insurance that they are running an AirBnB.

Ahh, right – the insurance is another important detail. Uber and Lyft provide their own insurance and they insist it’s plenty. But many insurance companies specifically state that you are NOT covered for rideshare driving. Some offer special upgraded insurance which is very expensive.

I just left my insurance unchanged, but for serious driving I’d want to look into it in more detail.

I’d clarify that there aren’t any standard personal auto policies that do *not* exclude any rideshare / livery / commercial driving, so you very likely may be left in the lurch (or hoping that Uber/Lyft’s policy protects you in a vicarious way) if you don’t have an appropriate endorsement or separate policy. It’s a completely different form of driving – time sensitive – and thus much more hazardous overall than typical personal auto exposures.

I worked for the pizza industry in Australia. They paid a rather curious $2.20 per delivery. Deliveries averaged 7km return. I ran the math on my that I had just bought brand new (don’t regret it, but wouldn’t do it again)
6.5l/100km @ $1.30/litre = $8.45/100km
$200 service (average guess, turned out cheaper) every 10,000km = $2/100km
$600 total tyres every 40,000km (worst case) $1.50/100km
$100 brakes every 40,000km (again worst case) $0.25/100km
Total running costs = $12.20/100km
Income = (100/7)*2.2 = $31.43/100km
Net income $19.23/100km
I did around 90 deliveries on a good a week. (90*7*19.23)/100 = $121.149 profit for the running costs on a good week. A bad week was 60 deliveries, so $80.77

My total repayments and insurance for that vehicle were $100, and my insurance was definitely aware that my ‘business’ use was delivering pizza. This meant on a good week my brand spankers car was paid for through delivery allowances, and on a bad week it was *mostly* paid for.

I also got paid the Australian legally mandated minimum wage. So I was guaranteed a fair(ish) wage even with zero deliveries.

Pizza delivery>>>>>>>>>>>>>>>>>Uber driving

Also, I got invited to parties, and sometimes I wasn’t allowed to leave until I had a lap dance…

I ve done AirBnB both as a landlord and as a renter. And I have got mixed experience. The whole reason AirBnB existed as a business was to get a “real” local experience. Which now turns to be big business where some really are pushing the principles. Some “highlights”:
– In Japan, we found a place where a two bed unit (25 sqm at max) had… 10 beds – bunk beds – and was “sharing” the internet with neighbors upstairs
– At home – australia – so many airbnb where I live, with amount of time it takes before and after (clean, wash, prepare, etc…), that you pay tax and damages we had… same as Uber… not sure it’s worth the $$

Isn’t the maximum range on the Leaf under 100 miles? Not a recommended vehicle for Uber driving, I presume. Whatever your experience was as an Uber driver, I believe it is only getting worse because Uber keeps pushing to bring in more drivers and lower the driver’s share of revenue.

The 2016 Leaf is good for about 120 miles of city driving, which (unfortunately) is most of what you do in Uber. At average city traffic speeds of 20MPH, plus waiting times, this would be an entire 8-hour work day on one charge, which is way more time than I want to spend in a car anyway.

Or you could stop at any DC fast charger while you take a break, which charges the car in about 30 minutes (and many of them in my area are even free)

I’d say an electric car is by far the best choice for Uber/Lyft driving, because fuel is cheap or free, it’s quieter and faster around town, plus you don’t have to feel quite as evil about dumping exhaust fumes into an urban area.

But it’s still no comparison to a bike, which is one of the reasons I stopped driving after ending the experiment.

As an Uber driver who has given more than 2,000 rides, I believe that an all electric car like a LEAF would have serious limitations if used for ride sharing. 8 hours for me would be WAY more than 120 miles on average, and once the charge got down to 25 miles or so, that puts you in jeopardy of not being able to complete longer rides. I have never seen an all electric vehicle used by a Lyft or Uber driver, probably mainly for this reason.

Ahh, sorry to disappoint you Rob, I don’t have any new secret charger locations. There are two free fast chargers in Longmont (Nissan dealer plus the Museum), which is plenty since the town is only about 5 miles square. But when I said “Town”, I meant “The Denver metro area” in this case, which includes a lot more of them. There are also a much larger number of free Level 2 (6 kW) chargers right here in Longmont, with the mall being the best collection. Those are still pretty useful as they will restore 30 miles of range to the car within the span of a good round of grocery shopping.

Hi MMM,
I have been driving uber full time for the past few months while looking for a new job (which I just found and will be starting in a couple weeks). I have done just about all of the math that there is to do for being an uber driver and it’s definitely not as dire as you made it sound. I have kept all of my “stats” since day 1 of driving in San Diego, and here is a pretty typical week for me:

Gross Earnings: $1022
Miles Driven: 1042
Total Hours: 54

I also have estimated my driving costs at $.25 per mile. Here is the breakdown:

Therefore my Earnings Before Taxes (EBT) are 1022-.25(1042)= $761.5. Divide this by 54 hours and you get $14.1 per hour.

HOWEVER, thanks to the IRS and the generous write off of 53.5cents per mile, I only pay taxes on less than half of the total earnings rather than the full amount which most people have to do. This bumps that hourly rate up a bit more if we are comparing apples to apples. Also this is driving FULL TIME which includes really crappy periods of time mid week. If you were to only drive at the peak times these numbers improve significantly.

The numbers may look better than yours because there are lots of driving incentives between uber and lyft that you have to capitalize on in order to be successful. I hope this provides some insight.

The Sentra is a good choice – one of the cheapest per mile. However, I would suggest that you also include your insurance and annual registration fees in those car costs, plus any costs relating to parking, tickets, time spent on administering the car, etc. If you drive less, you can keep an older car (or no car at all) which drops or eliminates these costs – this is why I include them in the per-mile numbers.

Also, good job on keeping a full record. Just to be clear, does that include ALL driving, unpaid and paid? And does the time include all wait times and time returning home at the end of a shift?

Because your gross earnings are close to $1 per mile, which is similar to Uber’s top-line rate. If you earned that much, it means you either did very little unpaid driving, or earned a lot from surges and tips.

Hi MMM,
Thanks for your response! I do not include insurance costs (which are $100/month) because this is a fixed cost that I would have whether or not I drove for uber. I do not have any parking costs or tickets because I am always either in the car or getting a bit of exercise right next to the car. I could maybe include the MARGINAL cost of insuring this newer vehicle vs. an older vehicle, but I think it’s fairly negligible.

Yes this includes ALL DRIVING. At the beginning of the week I reset TRIP A on the odometer to zero, and then I log time and mileage driven at the end of the week. Therefore this does not capture some wait time when I turn the engine off, but this is not often, perhaps an hour or 2 per week (and I round up hours spent when logging). However, if I am outside of the car with the engine off and eating lunch or writing an email, am I really working?

I get about $180 extra per week in tips and driving incentives. This is critical to making driving for uber/lyft worthwhile. Also I was once tipped $100 on a trip that was 2 miles. Something like this is quite out of the ordinary but if you talk to any full time uber driver it is bound to happen at some point.

Yeah – friend of a friend was driving evenings after classes and was in a minor fender bender. His insurance wouldn’t cover the damage to his vehicle. Maybe Uber takes care of your liability, but they leave you high and dry for coverage to your own vehicle without an expensive rider policy for business use of your car.

Without a business use rider on your insurance policy, you are gambling against your vehicle being totalled while driving. Which is not a gamble I would take in a 2 year old car.

Last year I made $800.00 from two referrals. Once those drivers hit fifty rides, Uber slipped $400.00 into my account. A most unexpected and wonderul addition to my income.

I am an actor so Ubering is great for those times when I am not in a show, because when I am in a show, I do not have time for anything else.

I also have received huge tips, a sixty dollar one from an airport ride, which was awesome, and many other smaller ones which on top of surge and bonuses kept me in the solid $8.00 an hour range once I crunched the numbers.

You may think $8.00 an hour is not worth my time, but believe me, the flexibility, not having a boss, and being able to write off all of my car costs make it very much worth it to me.

During my downtime I rehearse my music.

And sometimes I sing to my passengers. They love it. I also really enjoy driving the disabled. One young man in Boulder uses Uber five times a day with his little service dog. He is one of my favorite customers. As a blind man he told me that Uber changed his whole life for good.

I love being part of this company. As a libertarian women, the wild west nature of it, despite the seeming downfall of our CEO and all of the many scandals do not bother me at all, I WELCOME the chaos as taxi services are compelled by market forces to rebrand and get with the times.

My customers are mostly unaware of any Uber boycott (only one international businessman I drove in Boulder has mentioned it) and the rides keep rolling into my app.

No regrets and I have been driving for 18 months.

It helps me to think this way… instead of going out to Uber, I Uber when I am going out.

Meaning that when I have to run an errand with the car, I Uber for a couple hours and then do my errands. This way my customers are paying for my gas and car costs when I need to be out, especially during the winter.

I read on the Uber forum about one young man who bought his dream car and Ubered one weekend a month to make his car payment. Not everyone who does this is an idiot or doing it as their sole income. Most do it part time as a second job.

Annual car insurance cost for me lowered from $1200 to about $450 when I started working from home a couple of years ago (thanks to MMM for constantly reminding me of how much it really costs for my daily commute). This coverage is converting from 15000 miles a year to 4000 miles a year with a higher deductible. I had to call in and triple confirm for my insurance agent that I don’t drive to work anymore for her to believe me and to give me this rate.

I’m no expert on how insurance rate fluctuates but I’ve observed that with added or decreased annual miles, even if I don’t proactively notify the insurance company, the insurance will eventually find out and update my rate.

Does your auto insurance really cover you as a “full time driver”? I suspect it does not as you state that it is a fixed cost for you. Using a vehicle for business use is different than personal use and using it AS the business itself is likely a whole ‘nother dimension in insurance. You might want to read your policy thoroughly or have a chat with your agent.

Replying ate. but as the mome of a former Uber driver, unless things have changed, the only two insurance companies offering ride sharing insurance are Geico and USAA. Since we qualify for USAA my son’s add on isnurance was only six dollars, but for most other comapanies it is much higher.

His experience was that the airport rides are the big moneymakers, and the other option (we’re in Denver) was to take a book or study guide downtown late in the evening and find a free parking space and then take as many folks possible home within a short mile range, or else go on concert nights or foot ball games and take the a well alcohol filled group to the outer suburbs. The great abyss was the commuter crowd, to be avoided at all costs.

You are likely not covered from your insurance. If your passenger sues you because of an accident, you’re finished. I checked my insurance company in Canada, and on their website, they have a guesstimate calculator. It just asks you how much you’re already paying & how many hours of ride share per week – it added $500 for up to 10hr/week (50% more) and $625 for up to 20 hr/week. You’re doing more than 20 hours per week, so you probably fall into commercial licenses which will be more expensive.

Thanks for posting though. I had an accountant friend who told me Uber drivers made tons of money, and I wondered where the gap was – was it Uber giving rewards for volume, or what? For sure being able to deduct depreciation costs definitely helps.

How do you spell Pyramid Scam… its UBER making the money, not the drivers. I can bill my services out privately for 60/hr, why would I work for 7.00.hr ? My time is worth more than that. Also is the issue of licencing and liability. You need business insurance on your car, you need liability insurance in case a client sues for sexual misconduct, theft, etc. Deliver Pizza instead, tips are better.

God help you if someone gets hurt in an accident. And what about the thousands of cab drivers, that have paid thousands for cab licence’s ? They are now worthless.

Great post Pete, thanks for going undercover. As for the publicity mess(es) for Uber in the past year, if you didn’t see it, they just announced a massive data breach – from last year – that they apparently tried to cover up

Thanks for the insight. As someone who’s FI and loves driving, I thought working for Uber could be a blast. And I suppose it could be, for a pittance! Instead you’ve just crushed my dream. Now I need to look into that OTHER fun looking occupation: being the guy that plows the sidewalks for the city. Hey, we all have dreams!

Yes that guy always looks happy! Also the parks guy that drives the enormous enclosed riding lawnmower with THREE attached lawn mowers. He whips around the trees at our local park, looks like he’s having the time of his life.

“There’s no way Uber could be such a successful company if the pay rate were really this low. Is there?”

It’s not clear that they are successful. I mean, they’ve been very successful at raising capital and expanding, but they’re bleeding cash. And it seems that a lot of this cash is being bled by subsidizing drivers and riders, which is not a sustainable business model. Last I heard, they were going all-in on driverless cars to eliminate having to pay the drivers. If that’s where they’re putting all their chips, they’re in real trouble.

i had heard similar, which is probably why rates are not as cheap as they used to be. one wonders if eventually they’ll be cheaper than a regular taxi at all. not to mention some of their recent scandals are very reminiscent of taxi horror stories (ex: sexual misconduct).

at the end of the day they’ve more democratized a space that was previously way over-regulated and injected some technology into a previously stagnant enterprise, so i guess we can be thankful for that.

They are successful at spending VC money. They are successful at upending (I refuse to use the d-word) a rather sclerotic industry. I think Uber realizes that their business model depends on one of two things happening: Fully autonomous cars so there is no driver to pay at all and/or complete monopoly so that they can raise prices substantially.

To date, it seems that they are benefiting from ignorance on the part of drivers regarding how much it truly costs to drive a car once insurance, maintenance and replacement tires, brakes, etc are factored in. I wonder what the average tenure is for an Uber driver? What percentage actually stick with it long enough to start experiencing the maintenance issue?

As to the price, I think that the true advantage Uber has over traditional taxi or car service models is availability, not cost to the rider. In my city, where there aren’t many taxis (and public transport is laughable) the price of an Uber isn’t so much the appeal as the fact that you can get one within a reasonable time. Waiting on a taxi that may or may not show up in 30-45 minutes is the real problem that Uber is solving.

I do think that while Uber as a company may fail at some point, they have opened the door to a new model that some company or companies will be able to run profitably, eventually.

Uber has yet to turn a profit. They are burning through their VC capital, losing about 2 to 3 billion a year. Without additional capital investment, Uber would be bankrupt by the late summer of 2018. However, Softbank is buying in, but at a reduced valuation for the stock. The infusion of Softbank money will keep Uber afloat for a bit longer, but it is questionable if Uber can generate a profit. Uber essentially subsidizes the cost of rides, which makes it attractive to riders, but not so for drivers. My guess is that the Uber plan calls for driving their competition (cabs and livery companies) out of business, which would leave Uber as an unregulated monopoly. If that is in fact their plan, then the IPO will be very interesting to watch. I mean, who would put money into a company like this that already has such a toxic rep? Time will tell.

MMM, I enjoyed that read. I did a very similar experiment here in San Diego to report back to the Minimalist Group that I officiate.

I kept copious notes on the day. I created a spreadsheet that took into consideration not just gas, but depreciation, cost of tires, brakes, misc repairs – all broken down to the faction of a cent per mile. My net result was that sometimes I’d make as low as $8 per hour, and other times as much as $17.

I never did a full 40 hours type of driving in a week to get a real average. Driving full time, with the knowledge you would gain over time about the best places and times to drive, I suspect in our market and driving smart you might be able to maintain a $17 average.

Like you, I have had many conversations with Lyft and Uber drivers (both in person and online). Rarely are they aware of the actual cost side of their business. Those that are acutely aware of the gas, depreciation, maintenance, etc., do much better at optimizing their driving business.

One feature I wish Uber or Lyft had was the ability to draw a circle on the map and say, I don’t want to drive beyond that circle. Most drives want the really long rides, it is where the money is. However there are a lot of people that want to fill in a gap in the day, make a few bucks, but not get too far from home.

Example, one day at 3:30pm I pick up a ride and he is going to the airport. Great money (about 45 miles), but now I need to drive home again in 5pm traffic! I can see a parent raising their kids at home that has 4 hours in the afternoon open. Nothing going on, good time to slap on the Lyft sticker and make a few bucks – pay for the groceries – why not? However, the parent knows they need to be near home for a 3pm school pickup. A “perimeter” line on the map would help.

It is true in theory you can turn down a ride once you see that it is too far for you to travel, but you have already burned time getting to them and the rider is annoyed now because they need to start over and wait for another driver. There could be a lot of “gap” drivers if they knew they would not be taken 50 miles from home. The up side for Lyft/Uber is that most drivers don’t want the short rides. This feature would unleash a pool of people that actually WANT short drives to be close to home in case of a problem or to make a pending appointment.

WAYYYY to much for the comment section, but as you can see – I have thought about this – too much perhaps :-)

I think Bill has hit the nail on the head here. Just like anything else, simply showing up and saying “Ok, time to drive for Uber” will not be anywhere near as lucrative for the average driver as the person who makes an informed and concerted effort to minimize their costs and optimize their driving . A strong case can be made that there are Mustachian Uber/Lyft drivers, and average “uninformed” Uber/Lyft drivers. I see no reason that new technology for ride sharing will immediately make the uninitiated aware of the financial implications of their actions. Just like any other job or money making endeavour, doing the math and being informed really are the factors that lead to a higher likelihood of success.

If the company knows the driver’s location, trip origin, destination & average time needed between those places, AND if the driver could say I’m available from x o’clock to y o’clock, THEN the company could avoid giving a fare to someone who is going to clock off when they talk to the passenger, avoiding delays and disappointments for everyone.

This would not cover the time returning at the end, but if the driver could indicate her personal destination, this could be factored in too.

Nice article. I often wondered how the drivers make money, particularly since many of them drive expensive gas guzzlers. I figured it was a combo of (1) drivers not knowing the true cost of driving; (2) drivers who enjoy the driving and meeting people and (3) willing to work for low pay because some money is better than no money. As a rider, Uber and Lyft have really changed the landscape in Houston, a big city with no useful taxis. It’s now easier to be a one car family and rely more on cycling when you know you could always Uber in a pinch. It also makes it very easy to avoid driving after drinking. The sad joke used to be “if you don’t drink and drive in Texas, you’re not getting home” but that has changed for the better.

You should link to your ‘The True Cost of Commuting” article. I went back and dug that up. I wish that would have been on my mind when I bought my house about a year and a half ago. I live in an expensive area so I’m about 10 miles out. I should have been willing to pay as much as $100,000 more to be around 4 miles out (the next mile costs maybe $50,000 more). The rate I was able to get 3%, makes the $800 mentioned in the True Cost of Commuting article equivalent to interest on around $25000 rather than the $16000 mentioned there.

This post belongs on the MMM wall of fame. I often wonder about the economics of ride share driving when someone picks me up at the airport in a gigantic car SUV. I bring up the subject with drivers, and they are usually clueless about calculating their costs. Hope some of them read this post.

I’ve frequently have conversations with most Lyft/Uber drivers about how they like the work. I avoid asking how much money they make, but drivers often offer up that info. It always felt like the money they were making short-term was being heavily offset by hidden costs to be paid in the future. I do like the idea of using it as a carpooling tool though! For anyone who is forced to drive to work, insurance/maintenance/fuel are sunk costs. It would add a little to the overall cost of the ride, but excluding any parking fees, it could be a great way to offset the cost of commuting.

More on the bus to airport:
bus/transit systems in the Denver metro area are bad. bunch of notorious public debacles and general sprawl have made them suck. despite this, i have one time ridden the bus from DEN to downtown Denver, but it took forever and cost a lot.

I’ve given signing up for Uber/Lyft some thought. I figured the net pay would be much higher. However it seems like the hassles are big to be a very casual driver for either service. I’d love to pick up a fare if I’m headed across town or out of town for some hiking but the inconvenience of waiting for that fare would negate any monetary gains. Plus I generally dislike driving and the driving empty to pick up fares would be a pain. Anyway, thanks for the personal experiment results that reinforced my perception of driving for Uber/Lyft.

I’ll second that advice on the Prius. We recently picked up an 08 Prius for $3k. It has just over 200k miles, but still drives like new. It’s our second Prius of that generation, and we average about 48 mpg with them. Maintenance is super cheap, and we’ve had several mechanics comment on how they never need any work.

I have thought about doing a similar experiment, but even without a job it’s hard to find extra time. Also I didn’t know about the set destination feature. Doing a car share when you’re already driving sounds a lot more reasonable.

It didn’t really strike me as surprising that they wouldn’t take any of your suggestions into consideration because their profitability depends on the exploitative nature of their business where the drivers are uninformed and under paid. Maybe it’s just the recent bad press that makes me default to this pessimistic view of their leadership, but despite the transparency creating goodwill, as you describe, I can’t help but think the persistent focus on the short-term bottom line in corporate America and VC funded tech startups will drive companies like Uber to continue obfuscating data that allows them to make more money at the expense of their benefit-less non-employee drivers.

To embrace a more optimistic MMM-friendly view- maybe this represents an opportunity for other companies to differentiate and overtake them by being actually transparent and acting in the best interest of their drivers and customers?

I’m surprised Uber/Lyft are unwilling to email weekly a summary by shift, day & week of hours, paid/unpaid miles, and dollars/bonuses made to drivers. This would help drivers manage their availability for both company & driver’s benefit – and remind them of the money they are making.

It could make suggestions of optimal places to wait each day for faster service, lower costs, and lower pollution.

This line kind of blew my mind: ““Imagine developing a company specifically to take advantage of people’s ignorance of how expensive it really is to drive their own car. What would this company look like?”. Wonder if a similar line was ever said in the early days of Uber/Lyft by the founders.

I agree, mainly through talking to drivers that Lyft seems to be better for drivers than Uber. I also got really turned off by all the scandals involving Uber so whenever I need a ride I try to use Lyft if possible.

On an unrelated note, how awesome would it be to request an Uber/Lyft and have MMM show up as the driver??

Your math and reasoning would be more sound if it included consideration of emissions. We can have fun playing our money games today, but it won’t do us or our kids any good if society collapses due to catastrophic climate change.

Definitely true, Graham.. and aside from the fact that I used a renewable-energy-charged electric car for this story, if you read enough of these MMM articles you’ll find a lot of things that are pretty eco-oriented, as it’s the whole secret master plan of this blog.

I just try not to talk about it too openly in the articles, lest I be called a “Liberal” and lose half the audience. Let’s focus on something we can ALL agree on: getting rich and facilitating our financial FREEDOM!

It’s important to remember all the costs associated with self-employment as well. 1) both sides of Social Security/Medicare tax must be paid by the driver (15.3% of net earnings). When you work somewhere as an employee, your employer covers half of that (7.15%). Uber drivers are not employees, as currently configured (though this is being litigated in California in a way that is not going well for Uber), and so, are not covered by 2) workers’ compensation insurance (in case of accident – sure car insurance will cover the cost of vehicle repair and perhaps reimbursed medical expenses but what about wage replacement during a period of disability – that’s what workers’ compensation is for and the whole Uber gig economy just isn’t accounting for that) 3) unemployment compensation – in the event that you get kicked off the app (which is easy when your rating falls before 4.3 stars, please remember this folks when rating drivers! do you really want this person to be fired? If not, consider just making a comment to the company but keeping the rating high) or there is a flood of new drivers or there is an economic downturn, or #deleteUber really catches on, you’re not part of the system that covers periods of short term unemployment with wage replacement.

As a driver, MMM, you might consider perusing and signing on to the many Uber-driver petitions at a neat website called coworker.org, which is trying to use social media tools to promote the kind of worker organizing that is on the decline in this here new economy of ours. The coworker.org and other pressure led to Uber accepting in-app tips, which as you experienced, is a good step towards improving pay as an Uber driver.

Ironically it looks like some retirement communities have figured it out. Just allow people to drive low-speed electric vehicles like the Gem or golf carts on the same streets. Annual insurance $75.00. Even have designated lanes in some cases. I just visited some relatives in two of these communities in TX and TN and cars sit in garages. They take golf carts to the grocery store or around town. The communities have their own shuttles to the airport or trips to events in the big city. Uber not needed. Money stays local and does not go to some BS company trying to take over the world and make a few people rich at the expense of others. They even have their own dealerships and repair shops. Need strong local governments to make it work.

There is a practical reason for not disclosing the passenger’s destination. Drivers could discriminate against passengers based on the perceived socioeconomic or ethnocultural standing of that neighbourhood. You are discriminating too, but through a strictly economic cost/benefit lens. We see his play out in NYC when taxi drivers don’t stop for people of colour (which Uber mitigates by not showing passengers’ faces) or saying “I don’t drive north of 111th” or whatever. Studies show that only 11% of NYC trips start in the outer boroughs whereas 33% of Uber trips do; making ridesharing far more equitable for marginalized populations to access transportation. Uber could however share the trip length!

As I understand Uber policy, a rider must be at least 18 years of age to have an Uber account and request rides. Anyone under 18 must be accompanied by someone 18 years of age or older on any ride. Lyft has a somewhat similar policy.

I wonder if the young girl MMM picked up was using her mother’s Uber account then? I can’t imagine putting my middle-schooler (and her grade school brother) in a stranger’s car. Wow. WTF? And of course it puts the driver at risk too. This freaked me out that there are probably plenty of other parents doing this across the country too.

Great post! I really dislike the culture inside Uber, unfortunately I think it took obnoxious jerks to disrupt the municipal taxi monopolies, but that makes then pioneers and not settlers. Its good to see your Lyft experience is better.

Also agree about the hidden cost of car ownership. The numbers might be better in that ’99 Oddessy and Uber XL

Uber’s real secret is massive subsidies from investors. From the report:
“Uber passengers were paying only 41% of the actual cost of their trips; Uber was using these massive subsidies to undercut the fares and provide more capacity than the competitors who had to cover 100% of their costs out of passenger fares.”

It’s called “cornering the market”. Right now the venture capital investor money is subsidizing the fares so that they are artificially low, thus undercutting taxi drivers. Once they’ve cornered the market and driven everyone else out (cannibalizing public transportation in the process), the company will go public, the investors paid off, and the market now cornered, the fares will go up for the passenger while the driver will be replaced by a driverless vehicle.

But don’t look further than your nose or your wallet and you won’t think about all this. Ignorance is bliss.

Nice article and experiment on using Uber and Lyft. I’ve been curious to try it myself, but my car is a bit too old and I don’t want to buy a car to just to make a few bucks, especially since it would probably end up being a net loss.

Uber can behave as badly as they want to. They’re just creating a market for their competition. We are at the bleeding edge of the sharing economy. I’m sure a less centralized service will eventually emerge. All they’re doing is brokering buyers and sellers – look at what happened to stock trading.

When I lived in Germany back in 2008, there was a ride sharing website you could go to if you were going to go on a long trip. It’s kind of like pre-arranged hitchhiking but you pay. As the driver, you say where you’ll be traveling to and which days and others can pay to ride along with you. So you’re making money to drive to where you were going to go anyways. Seems like a better setup than Uber, which is just a cheap taxi.

i’d like to think that is the future. where the company is just a web-based conduit for connecting drivers of all types (pros, casuals) and passengers rather than just a taxi service with a nicer app. transaction would be completely between the driver and passenger, with the company making their money in web advertising or whatever. sounds like a possible business model to me, but perhaps there are laws on the books that prevent it or make it very dangerous for the entrepreneur.

“For example, some people worry about what will happen to driving jobs as self-driving vehicles gradually take over. But I’m excited about the ways this can make our lives safer, quieter, and less expensive as we give up on owning personal cars, ride bikes much more, and use automated cars as a service whenever the bike is impractical.”

This. Exactly this. Autonomous car service has the potential to cut car costs in half and car injuries and fatalities by a factor of ten. Humans have more important things to do than perform as meat servos piloting cars.

Wow, thanks for “lifting the hood” on UBER driving MMM! I’ve always heard it was not a good business. Most drivers in my area do both UBER and Lyft. From here on out, I’ll be deleting UBER, and will treat my future Lyft drivers to healthy cash tips. I enjoy my conversations with drivers, and always find we have more in common than I expect. A great reminder that we all belong to each other.

Thanks Hunter – I enjoy reading those analyses, especially when the oil companies end up being way wrong in retrospect :-)

If you look back at the equivalent BP report from 2011 (which I think we should all do in the course of these comments), you might find that they drastically under-estimated the amount of renewable energy and the takeoff of electric cars. Similarly, today’s report might be more of a linear projection of current trends, whereas if the pace of change continues to be exponential (as the “death” article predicts), they’ll look overly conservative.

After all, it’s not in an oil company’s best interests to forecast its own extinction within ten years, so even if that were to be the case, not many would do it.

Thanks for doing this experiment so that I don’t have too. Driving other people around for an effective $5 an hour seems pretty awful. The more interesting option to me is to rent out a car to a Uber driver that can’t afford their own. If you get the numbers right, it can be truly passive income to you and a good deed for them. Plus, you can use the car once in a while when you need it.

Thank you so much for sharing this MMM! Sometimes it feels like Ubering would be nice to be your own boss for a bit, but earning next to nothing does not.

Edmunds “True cost to own” really opened my eyes to how big depreciation plays into the total cost of ownership. Every time I update my vehicle value in mint, it reminds me that vehicles primarily depreciate by the mile (among other factors).

Lastly, yea, the car damage risk and personal injury risk are totally asymmetric. I got T-boned a year ago and still am disturbed by how little insurance covers (try googling “diminution of value”). I’ve long thought a mustachian approach to car insurance would make a great article (even for bicyclists).

Here in Amsterdam there’s a ridesharing service called Abel, which uses a completely electric fleet. Passengers book individual seats, meaning the driver may pick up several people along the route. They advertise it as a way to meet people.

Theres also a few cities like Lyon, France where they take city bike-renting to the next level. Instead of bikes you can rent a small electric vehicle and return it to various points in the city when you’re done.

Uber, more than ever, and Lyft as well, seems as much as anything to be a sign of how dystopian America has become. And, sorry, MMM, on this issue this quite non-l(L)iberatarian sharply parts with you.

Mr. Money Mustache, you need to try out delivering food on your bike using apps like Postmates, Doordash, Uber Eats, Caviar, Tapingo, etc. It’s the ultimate Mustachian sharing economy/gig economy gig! You deliver food to people, but in most cities, you can use your bike!

I’ve been doing food deliveries on my bike for over 2 years and have had a blast doing it! Some reasons why you need to try it out:

(1) You essentially get paid to bike and exercise – something that EVERYONE needs to do anyway;
(2) you have almost no operating costs since you’re riding your bike (I use the bikeshare system in my own city – something I always pay for anyway because I love bikeshare – so I literally have no costs since I don’t have to do maintenance on a bikeshare bike);
(3) With respect to operating costs, if you count the health benefits of biking, I’d argue that your operating costs are actually positive, even if you got paid nothing.
(4) You don’t cause any pollution and if anything, you’re causing less pollution since you’re getting food to someone that might otherwise get to them in a car;
(5) it’s super fun – it’s like you gamify your biking.
(6) You don’t have to deal with traffic. Just roll up to a restaurant, apartment building, whatever and you’re good to go.

Honestly, I’m in a ton of facebook groups with folks who do deliveries and no one ever seems to do it by bike even though they could. When I signed up for Uber Eats in my city a year ago, they told me I was the first person to sign up as a bike courier.

Just a thought anyway if you’re interested sharing economy gigs that blend in some of that biking goodness.

Cool Kevin – I agree that could be a better gig, since you’re improving both yourself and your city when you ride a bike. I wonder if an electric bike would be even better – slightly higher cost per mile, but many more deliveries per hour.

Turns out the money they saved on not paying the drivers reasonably went to pay off some hackers and try (unsuccessfully, of course) to keep a breach under the covers. More signs that Uber is run by terrible, terrible people :(

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